Green Dot Reports Fourth Quarter and Full Year 2016 Results

For the fourth quarter of 2016, Green Dot reported GAAP and non-GAAP
total operating revenues1 of $162.8 million and $163.2
million, respectively. Green Dot also reported GAAP net loss and GAAP
diluted loss per common share of $1.3 million and $0.03, respectively
and adjusted EBITDA1 and non-GAAP diluted earnings per common
share1 of $21.8 million and $0.19, respectively.

Said Green Dot Founder and CEO, Steve Streit, "I'm pleased to report
that Q4 was another sequentially strong quarter for Green Dot. Solid
revenue performance across our businesses combined with the success of
numerous efficiency projects came together to deliver non-GAAP top line
growth of 8% and non-GAAP EPS growth of over 200%. For the full year,
Green Dot delivered consolidated growth of 3% in non-GAAP revenue and 8%
in non-GAAP EPS. The strong results of the quarter and the year overall
are in large part due to our talented team of executive leaders across
the enterprise working in tight collaboration to execute our Six Step
Plan to deliver at least $1.75 in EPS in 2017. I especially want to
thank all our Green Dot team members from the United States, China and
the Philippines where approximately 900 direct employees and another
1,000 contract employees work every day to make Green Dot successful. As
we head further into 2017, we believe that Green Dot is an increasingly
important and powerful financial services franchise that stands at the
forefront among the nation’s leading and most successful FinTech banking
platforms. I’m honored to serve as CEO of such an institution and am
excited to lead the pursuit of the many opportunities that lay ahead."

GAAP financial results for the fourth quarter of 2016 compared to the
fourth quarter of 2015:

Total operating revenues on a generally accepted accounting principles
(GAAP) basis were $162.8 million for the fourth quarter of 2016, up
from $150.9 million for the fourth quarter of 2015, representing a
year-over-year increase of 7.8%.

GAAP net loss was $1.3 million for the fourth quarter of 2016, from
net loss of $6.1 million for the fourth quarter of 2015, representing
a year-over-year improvement of 77.9%.

GAAP basic loss per common share was $0.03 for the fourth quarter of
2016, from loss per common share of $0.12 for the fourth quarter of
2015, representing a year-over-year improvement of 75.0%.

GAAP diluted loss per common share was $0.03 for the fourth quarter of
2016, from loss per common share of $0.12 for the fourth quarter of
2015, representing a year-over-year improvement of 75.0%.

Non-GAAP financial results for the fourth quarter of 2016 compared to
the fourth quarter of 2015:1

Non-GAAP total operating revenues1 were $163.2 million for
the fourth quarter of 2016, up from $151.0 million for the fourth
quarter of 2015, representing a year-over-year increase of 8.1%.

Adjusted EBITDA1 was $21.8 million, or 13.4% of non-GAAP
total operating revenues1 for the fourth quarter of 2016,
up from $12.7 million, or 8.4% of non-GAAP total operating revenues1
for the fourth quarter of 2015, representing a year-over-year increase
of 71.7%.

Non-GAAP net income1 was $9.6 million for the fourth
quarter of 2016, up from $3.3 million for the fourth quarter of 2015,
representing a year-over-year increase of 193.0%.

Non-GAAP diluted earnings per share1 was $0.19 for the
fourth quarter of 2016, up from $0.06 for the fourth quarter of 2015,
representing a year-over-year increase of 216.7%.

The following table shows the Company's quarterly key business metrics
for each of the last eight calendar quarters. Please refer to the
Company's latest Annual Report on Form 10-K for a description of the key
business metrics.

2016

2015

Q4

Q3

Q2

Q1

Q4

Q3

Q2

Q1

(In millions)

Number of cash transfers

9.37

9.36

9.35

9.71

9.71

9.53

9.55

10.09

Number of tax refunds processed

0.06

0.10

2.18

8.18

0.06

0.10

2.00

8.52

Number of active cards at quarter end

4.13

4.09

4.28

4.75

4.50

4.51

4.80

5.38

Gross dollar volume

$

5,681

$

5,338

$

5,372

$

6,569

$

5,441

$

5,040

$

5,177

$

6,350

Purchase volume

$

4,012

$

3,759

$

3,863

$

4,708

$

3,866

$

3,676

$

3,829

$

4,684

Said Mark Shifke, Green Dot’s Chief Financial Officer, "Q4 2016 was a
very strong quarter for Green Dot, completing an important and
successful year for our company. Non-GAAP revenue grew by 8%
year-over-year in the period to $163 million while adjusted EBITDA
margins expanded by approximately 500 basis points to generate $21.8
million of adjusted EBITDA, yielding remarkable non-GAAP EPS growth of
217%- or more than 3 times that of our year-ago quarter- to $0.19. Our
strong Q4 margin performance is illustrative of the financial benefits
we’re realizing from our increasingly more efficient operating platform
that supports our increasingly diverse lines of business across the
consolidated enterprise. On a full year basis, adjusted EBITDA was up 3%
YoY to $156.3 million with non-GAAP EPS up by 8.1% to $1.46."

Outlook for 2017

Green Dot has provided its outlook for 2017. Green Dot’s outlook is
based on a number of assumptions that management believes are reasonable
at the time of this earnings release. Information regarding potential
risks that could cause the actual results to differ from these
forward-looking statements is set forth below and in Green Dot's filings
with the Securities and Exchange Commission.

Green Dot's outlook reflects an expectation that Green Dot will incur
incremental expenses in 2017 related to the delay in migration of its
remaining customer accounts from its former processor to its new
processor, and that Green Dot will successfully recoup such expenses.
This outlook also assumes that the acquisition of UniRush, LLC closes in
the first quarter of 2017 and that the acquired entity’s financial
performance is at the middle of contribution ranges Green Dot has
projected this entity will achieve over the last three quarters of 2017.

Total Operating Revenues

Green Dot expects full year non-GAAP total consolidated operating
revenues2 to be between $815 million to $830 million.

For Q1, Green Dot expects total consolidated operating revenues to be
approximately $230 million, excluding any revenue associated with the
acquisition of UniRush, LLC.

Adjusted EBITDA2

Green Dot expects full year consolidated adjusted EBITDA2 between
$184 million to $191 million.

Non-GAAP EPS2

Green Dot expects full year consolidated non-GAAP EPS2
between $1.85 to $1.93.

Range

Low

High

(In millions)

Adjusted EBITDA

$

184.0

$

191.0

Depreciation and amortization*

(37.0

)

(37.0

)

Net interest income

4.0

4.0

Non-GAAP pre-tax income

$

151.0

$

158.0

Tax impact**

(53.7

)

(56.2

)

Non-GAAP net income

$

97.3

$

101.8

Diluted weighted-average shares issued and outstanding

52.7

52.7

Non-GAAP earnings per share

$

1.85

$

1.93

*

Excludes the impact of amortization on acquired intangible assets

**

Assumes a non-GAAP effective tax rate of 35.6% for full year

1

Reconciliations of total operating revenues to non-GAAP total
operating revenues, net income to non-GAAP net income, diluted
earnings per share to non-GAAP diluted earnings per share and net
income to adjusted EBITDA, respectively, are provided in the tables
immediately following the consolidated financial statements.
Additional information about the Company's non-GAAP financial
measures can be found under the caption “About Non-GAAP Financial
Measures” below.

2

Reconciliations of forward-looking guidance for these non-GAAP
financial measures to their respective, most directly comparable
projected GAAP financial measures are provided in the tables
immediately following the reconciliation of Net Income to Adjusted
EBITDA.

Conference Call

The Company will host a conference call to discuss fourth quarter 2016
financial results today at 5:00 p.m. ET. Hosting the call will be Steve
Streit, Chief Executive Officer, and Mark Shifke, Chief Financial
Officer. The conference call can be accessed live over the phone by
dialing (888) 348-8307, or for international callers (412) 902-4242. A
replay will be available approximately two hours after the call
concludes and can be accessed by dialing (844) 512-2921, or for
international callers (412) 317-6671; and entering the conference ID
10099939. The replay of the webcast will be available until Wednesday,
March 1, 2017. The call will be webcast live from the Company's investor
relations website at http://ir.greendot.com/.

Forward-Looking Statements

This earnings release contains forward-looking statements, which are
subject to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. These statements include, among other
things, statements regarding the Company's future performance contained
under "Outlook for 2017" and in the quotes of its executive officers and
other future events that involve risks and uncertainties. Actual results
may differ materially from those contained in the forward-looking
statements contained in this earnings release, and reported results
should not be considered as an indication of future performance. The
potential risks and uncertainties that could cause actual results to
differ from those projected include, among other things, the timing and
impact of revenue growth activities, the Company's dependence on
revenues derived from Walmart and three other retail distributors,
impact of competition, the Company's reliance on retail distributors for
the promotion of its products and services, demand for the Company's new
and existing products and services, continued and improving returns from
the Company's investments in new growth initiatives, the extent to which
the Company’s processing technology partner covers the Company’s
expenses and other losses associated with the processor migration issues
that began in May 2016 and have caused a delay in the Company’s
processor migration until at least the first half of 2017, the proposed
acquisition of UniRush does not close, is delayed or materially altered,
potential difficulties in integrating operations of acquired entities
and acquired technologies, the Company's ability to operate in a highly
regulated environment, changes to existing laws or regulations affecting
the Company's operating methods or economics, the Company's reliance on
third-party vendors, changes in credit card association or other network
rules or standards, changes in card association and debit network fees
or products or interchange rates, instances of fraud developments in the
prepaid financial services industry that impact prepaid debit card usage
generally, business interruption or systems failure, including any new
issues that could develop in connection with the Company's processor
migration scheduled to occur in the first half of 2017, and the
Company's involvement litigation or investigations. These and other
risks are discussed in greater detail in the Company's Securities and
Exchange Commission filings, including its most recent annual report on
Form 10-K and quarterly report on Form 10-Q, which are available on the
Company's investor relations website at ir.greendot.com
and on the SEC website at www.sec.gov.
All information provided in this release and in the attachments is as
of February 22, 2017, and the Company assumes no obligation to update
this information as a result of future events or developments.

About Non-GAAP Financial Measures

To supplement the Company's consolidated financial statements presented
in accordance with accounting principles generally accepted in the
United States of America (GAAP), the Company uses measures of operating
results that are adjusted to exclude net interest income and expense;
income tax benefit and expense; depreciation and amortization; employee
stock-based compensation expense; stock-based retailer incentive
compensation expense; co-op advertising costs; change in the fair value
of contingent consideration; transaction costs; impairment charges;
extraordinary severance expenses; and other charges and income. This
earnings release includes non-GAAP total operating revenues, non-GAAP
net income, non-GAAP earnings per share, non-GAAP weighted-average
shares issued and outstanding and adjusted EBITDA. It also includes
first quarter guidance for total consolidated operating revenues and
full-year 2017 guidance for non-GAAP total consolidated operating
revenues, adjusted EBITDA, non-GAAP net income and non-GAAP EPS. These
non-GAAP financial measures are not calculated or presented in
accordance with, and are not alternatives or substitutes for, financial
measures prepared in accordance with GAAP, and should be read only in
conjunction with the Company's financial measures prepared in accordance
with GAAP. The Company's non-GAAP financial measures may be different
from similarly-titled non-GAAP financial measures used by other
companies. The Company believes that the presentation of non-GAAP
financial measures provides useful information to management and
investors regarding underlying trends in its consolidated financial
condition and results of operations. The Company's management regularly
uses these supplemental non-GAAP financial measures internally to
understand, manage and evaluate the Company's business and make
operating decisions. For additional information regarding the Company's
use of non-GAAP financial measures and the items excluded by the Company
from one or more of its historic and projected non-GAAP financial
measures, investors are encouraged to review the reconciliations of the
Company's historic and projected non-GAAP financial measures to the
comparable GAAP financial measures, which are attached to this earnings
release, and which can be found by clicking on “Financial Information”
in the Investor Relations section of the Company's website at http://ir.greendot.com/.

About Green Dot

Green Dot Corporation, along with its wholly owned subsidiaries, is a
pro-consumer financial technology innovator with a mission to provide a
full range of affordable and accessible financial services to the
masses. Green Dot is a leading provider of reloadable prepaid debit
cards and cash reload processing services in the United States. Green
Dot is also a leader in mobile technology and mobile banking with its
award-winning GoBank mobile checking account and a top 20 debit card
issuer among all banks and credit unions in the country. Through its
wholly owned subsidiary, TPG, Green Dot is additionally the largest
processor of tax refund disbursements in the U.S. Green Dot's products
and services are available to consumers through a large-scale
"branchless bank" distribution network of approximately 100,000 U.S.
locations, including retailers, neighborhood financial service center
locations, and tax preparation offices, as well as online, in the
leading app stores and through leading online tax preparation providers.
Green Dot Corporation is headquartered in Pasadena, Calif., with
additional facilities throughout the United States and in Shanghai,
China.

GREEN DOT CORPORATIONCONSOLIDATED BALANCE SHEETS

December 31, 2016

December 31, 2015

(Unaudited)

Assets

(In thousands, except par value)

Current assets:

Unrestricted cash and cash equivalents

$

732,676

$

772,128

Federal funds sold

—

1

Restricted cash

12,085

5,793

Investment securities available-for-sale, at fair value

46,686

49,106

Settlement assets

137,083

69,165

Accounts receivable, net

40,150

42,153

Prepaid expenses and other assets

32,186

30,511

Income tax receivable

12,570

6,434

Total current assets

1,013,436

975,291

Investment securities available-for-sale, at fair value

161,740

132,433

Loans to bank customers, net of allowance for loan losses of $277
and $426 as of December 31, 2016 and 2015, respectively

6,059

6,279

Prepaid expenses and other assets

4,142

6,416

Property and equipment, net

82,621

78,877

Deferred expenses

16,647

14,509

Net deferred tax assets

4,648

3,864

Goodwill and intangible assets

451,051

473,779

Total assets

$

1,740,344

$

1,691,448

Liabilities and Stockholders’ Equity

Current liabilities:

Accounts payable

$

22,856

$

37,186

Deposits

737,414

652,145

Obligations to customers

46,043

61,300

Settlement obligations

4,877

5,074

Amounts due to card issuing banks for overdrawn accounts

1,211

1,067

Other accrued liabilities

102,426

87,635

Deferred revenue

25,005

22,901

Note payable

20,966

20,966

Total current liabilities

960,798

888,274

Other accrued liabilities

12,330

37,894

Note payable

79,720

100,686

Net deferred tax liabilities

3,763

1,272

Total liabilities

1,056,611

1,028,126

Stockholders’ equity:

Convertible Series A preferred stock, $0.001 par value: 10 shares
authorized as of December 31, 2016and 2015; 0 and 2 shares
issued and outstanding as of December 31, 2016 and 2015,
respectively

—

2

Class A common stock, $0.001 par value; 100,000 shares authorized
as of December 31, 2016and 2015; 50,513 and 50,502 shares
issued and outstanding as of December 31, 2016 and 2015,
respectively

51

51

Additional paid-in capital

358,155

379,376

Retained earnings

325,708

284,108

Accumulated other comprehensive loss

(181

)

(215

)

Total stockholders’ equity

683,733

663,322

Total liabilities and stockholders’ equity

$

1,740,344

$

1,691,448

GREEN DOT CORPORATIONCONSOLIDATED STATEMENTS OF
OPERATIONS(UNAUDITED)

Three Months EndedDecember 31,

Year Ended December 31,

2016

2015

2016

2015

(In thousands, except per share data)

Operating revenues:

Card revenues and other fees

$

82,337

$

75,179

$

337,821

$

318,083

Processing and settlement service revenues

31,541

27,607

184,342

182,614

Interchange revenues

48,890

48,142

196,611

196,523

Stock-based retailer incentive compensation

—

—

—

(2,520

)

Total operating revenues

162,768

150,928

718,774

694,700

Operating expenses:

Sales and marketing expenses

65,487

60,444

249,096

230,441

Compensation and benefits expenses

37,377

44,856

159,456

168,226

Processing expenses

26,796

23,928

107,556

102,144

Other general and administrative expenses

36,630

33,479

139,350

134,560

Total operating expenses

166,290

162,707

655,458

635,371

Operating (loss) income

(3,522

)

(11,779

)

63,316

59,329

Interest income

1,896

1,113

7,367

4,737

Interest expense

(1,503

)

(1,434

)

(9,122

)

(5,944

)

(Loss) income before income taxes

(3,129

)

(12,100

)

61,561

58,122

Income tax (benefit) expense

(1,784

)

(6,027

)

19,961

19,707

Net (loss) income

(1,345

)

(6,073

)

41,600

38,415

Loss (income) attributable to preferred stock

—

177

(802

)

(1,102

)

Net (loss) income available to common stockholders

$

(1,345

)

$

(5,896

)

$

40,798

$

37,313

Basic (loss) earnings per common share:

$

(0.03

)

$

(0.12

)

$

0.82

$

0.73

Diluted (loss) earnings per common share:

$

(0.03

)

$

(0.12

)

$

0.80

$

0.72

Basic weighted-average common shares issued and outstanding:

50,371

50,500

49,535

51,332

Diluted weighted-average common shares issued and outstanding:

51,662

51,168

50,797

51,875

GREEN DOT CORPORATIONCONSOLIDATED STATEMENTS OF
CASH FLOWS(UNAUDITED)

Year Ended December 31,

2016

2015

(In thousands)

Operating activities

Net income

$

41,600

$

38,415

Adjustments to reconcile net income to net cash provided by
operating activities:

Represents the diluted weighted-average shares of Class A common
stock for the periods indicated.

(1)

To supplement the Company’s consolidated financial statements
presented in accordance with GAAP, the Company uses measures of
operating results that are adjusted to exclude various, primarily
non-cash, expenses and charges. These financial measures are not
calculated or presented in accordance with GAAP and should not be
considered as alternatives to or substitutes for operating revenues,
operating income, net income or any other measure of financial
performance calculated and presented in accordance with GAAP. These
financial measures may not be comparable to similarly-titled
measures of other organizations because other organizations may not
calculate their measures in the same manner as we do. These
financial measures are adjusted to eliminate the impact of items
that the Company does not consider indicative of its core operating
performance. You are encouraged to evaluate these adjustments and
the reasons we consider them appropriate.

The Company believes that the non-GAAP financial measures it presents
are useful to investors in evaluating the Company’s operating
performance for the following reasons:

stock-based retailer incentive compensation is a non-cash GAAP
accounting charge that is an offset to the Company’s actual revenues
from operations as the Company has historically calculated them. This
charge resulted from the monthly lapsing of the Company’s right to
repurchase a portion of the 2,208,552 shares it issued to its largest
distributor, Walmart, in May 2010. By adding back this charge to the
Company’s GAAP total operating revenues, investors can make direct
comparisons of the Company’s revenues from operations prior to May
2015, when the repurchase right fully lapsed, and thus more easily
perceive trends in the Company’s core operations. Further, because the
monthly charge is based on the then-current fair market value of the
shares as to which the Company’s repurchase right lapses, adding back
this charge eliminates fluctuations in the Company’s operating
revenues caused by variations in its stock price and thus provides
insight on the operating revenues directly associated with those core
operations;

the Company records employee stock-based compensation from period to
period, and recorded employee stock-based compensation expenses of
approximately $7.4 million and $7.9 million for the three months ended
December 31, 2016 and 2015, respectively. By comparing the Company’s
adjusted EBITDA, non-GAAP net income and non-GAAP diluted earnings per
share in different historical periods, investors can evaluate the
Company’s operating results without the additional variations caused
by employee stock-based compensation expense, which may not be
comparable from period to period due to changes in the fair market
value of the Company’s Class A common stock (which is influenced by
external factors like the volatility of public markets and the
financial performance of the Company’s peers) and is not a key measure
of the Company’s operations;

adjusted EBITDA is widely used by investors to measure a company’s
operating performance without regard to items, such as net interest
income and expense, income tax benefit and expense, depreciation and
amortization, employee stock-based compensation expense, stock-based
retailer incentive compensation expense, changes in the fair value of
contingent consideration, transaction costs, impairment charges,
severance costs related to extraordinary personnel reductions, and
other charges and income that can vary substantially from company to
company depending upon their respective financing structures and
accounting policies, the book values of their assets, their capital
structures and the methods by which their assets were acquired; and

securities analysts use adjusted EBITDA as a supplemental measure to
evaluate the overall operating performance of companies.

The Company’s management uses the non-GAAP financial measures:

as measures of operating performance, because they exclude the impact
of items not directly resulting from the Company’s core operations;

for planning purposes, including the preparation of the Company’s
annual operating budget;

to allocate resources to enhance the financial performance of the
Company’s business;

to evaluate the effectiveness of the Company’s business strategies; and

in communications with the Company’s board of directors concerning the
Company’s financial performance.

The Company understands that, although adjusted EBITDA and other
non-GAAP financial measures are frequently used by investors and
securities analysts in their evaluations of companies, these measures
have limitations as an analytical tool, and you should not consider them
in isolation or as substitutes for analysis of the Company’s results of
operations as reported under GAAP. Some of these limitations are:

that these measures do not reflect the Company’s capital expenditures
or future requirements for capital expenditures or other contractual
commitments;

that these measures do not reflect changes in, or cash requirements
for, the Company’s working capital needs;

that these measures do not reflect interest expense or interest income;

that these measures do not reflect cash requirements for income taxes;

that, although depreciation and amortization are non-cash charges, the
assets being depreciated or amortized will often have to be replaced
in the future, and these measures do not reflect any cash requirements
for these replacements; and

that other companies in the Company’s industry may calculate these
measures differently than the Company does, limiting their usefulness
as comparative measures.

(2)

This expense consists of the recorded fair value of the shares of
Class A common stock for which the Company’s right to repurchase has
lapsed pursuant to the terms of the May 2010 agreement under which
they were issued to Wal-Mart Stores, Inc., a contra-revenue
component of the Company’s total operating revenues. The Company
does not believe these non-cash expenses are reflective of ongoing
operating results. Our right to repurchase any shares issued to
Walmart fully lapsed during the three months ended June 30, 2015. As
a result, we no longer recognize stock-based retailer incentive
compensation in future periods.

(3)

This expense consists of certain co-op advertising costs recognized
as contra-revenue under GAAP. The Company believes the substance of
the costs incurred are a result of advertising and is not reflective
of ongoing total operating revenues. The Company believes that
excluding co-op advertising costs from total operating revenues
facilitates the comparison of our financial results to the Company's
historical operating results.

(4)

The Company does not include any income tax impact of the associated
non-GAAP adjustment to non-GAAP total operating revenues or adjusted
EBITDA, as the case may be, because each of these non-GAAP financial
measures is provided before income tax expense.

(5)

This expense consists primarily of expenses for employee stock
options and restricted stock units. Employee stock-based
compensation expense is not comparable from period to period due to
changes in the fair market value of the Company’s Class A common
stock (which is influenced by external factors like the volatility
of public markets and the financial performance of the Company’s
peers) and is not a key measure of the Company’s operations. The
Company excludes employee stock-based compensation expense from its
non-GAAP financial measures primarily because it consists of
non-cash expenses that the Company does not believe are reflective
of ongoing operating results. Further, the Company believes that it
is useful to investors to understand the impact of employee
stock-based compensation to its results of operations. This expense
is included as a component of compensation and benefits expenses on
our consolidated statements of operations.

(6)

The Company excludes certain income and expenses that are the result
of acquisitions. These acquisition related adjustments include the
amortization of acquired intangible assets, changes in the fair
value of contingent consideration, settlements of contingencies
established at time of acquisition and other acquisition related
charges, such as integration charges and professional and legal
fees, which result in the Company recording expenses or fair value
adjustments in its GAAP financial statements. The Company analyzes
the performance of its operations without regard to these
adjustments. In determining whether any acquisition related
adjustment is appropriate, the Company takes into consideration,
among other things, how such adjustments would or would not aid in
the understanding of the performance of its operations. These items
are included as a component of other general and administrative
expenses on our consolidated statements of operations.

(7)

The Company excludes certain income and expenses that are not
reflective of ongoing operating results. It is difficult to estimate
the amount or timing of these items in advance. Although these
events are reflected in the Company's GAAP financial statements, the
Company excludes them in it's non-GAAP financial measures because
the Company believes these items may limit the comparability of
ongoing operations with prior and future periods. These adjustments
include amortization attributable to deferred financing costs,
impairment charges related to internal-use software, and other
charges, which consists of expenses incurred with our proxy contest
and expenses related to gain or loss contingencies. In determining
whether any such adjustments is appropriate, the Company takes into
consideration, among other things, how such adjustments would or
would not aid in the understanding of the performance of its
operations. These items, except for amortization of deferred
financing costs, which is included as a component of interest
expense, are included within other general and administrative
expenses on our consolidated statements of operations.

(8)

During the three months ended December 31, 2016, we recorded a $0.7
million charge for severance costs related to extraordinary
personnel reductions. Although severance expenses are an ordinary
part of our operations, the magnitude and scale of the reduction in
workforce we began to implement in the three months ended September
30, 2016 is not expected to be repeated. We expect to incur
additional severance charges related to this reduction in workforce
in future periods and expect all such charges to be recorded by the
end of the first half of 2017. This expense is included as a
component of compensation and benefits expenses on our consolidated
statements of operations.

These amounts represent estimated adjustments for net interest
expense, income taxes, depreciation and amortization, employee
stock-based compensation expense, contingent consideration,
transaction costs, impairment charges, severance costs related to
extraordinary personnel reductions, and other income and expenses.
Employee stock-based compensation expense includes assumptions about
the future fair value of the Company’s Class A common stock (which
is influenced by external factors like the volatility of public
markets and the financial performance of the Company’s peers).